Correlation Between Hong Kong and Cardinal Health
Can any of the company-specific risk be diversified away by investing in both Hong Kong and Cardinal Health at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hong Kong and Cardinal Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hong Kong Land and Cardinal Health, you can compare the effects of market volatilities on Hong Kong and Cardinal Health and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hong Kong with a short position of Cardinal Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hong Kong and Cardinal Health.
Diversification Opportunities for Hong Kong and Cardinal Health
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hong and Cardinal is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Hong Kong Land and Cardinal Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardinal Health and Hong Kong is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hong Kong Land are associated (or correlated) with Cardinal Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardinal Health has no effect on the direction of Hong Kong i.e., Hong Kong and Cardinal Health go up and down completely randomly.
Pair Corralation between Hong Kong and Cardinal Health
Assuming the 90 days trading horizon Hong Kong is expected to generate 12.74 times less return on investment than Cardinal Health. But when comparing it to its historical volatility, Hong Kong Land is 11.08 times less risky than Cardinal Health. It trades about 0.07 of its potential returns per unit of risk. Cardinal Health is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8,508 in Cardinal Health on September 12, 2024 and sell it today you would earn a total of 3,561 from holding Cardinal Health or generate 41.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.4% |
| Values | Daily Returns |
Hong Kong Land vs. Cardinal Health
Performance |
| Timeline |
| Hong Kong Land |
| Cardinal Health |
Hong Kong and Cardinal Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hong Kong and Cardinal Health
The main advantage of trading using opposite Hong Kong and Cardinal Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hong Kong position performs unexpectedly, Cardinal Health can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cardinal Health will offset losses from the drop in Cardinal Health's long position.| Hong Kong vs. Wheaton Precious Metals | Hong Kong vs. Universal Display Corp | Hong Kong vs. Zoom Video Communications | Hong Kong vs. Cornish Metals |
| Cardinal Health vs. Hong Kong Land | Cardinal Health vs. Neometals | Cardinal Health vs. Coor Service Management | Cardinal Health vs. Fidelity Sustainable USD |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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